Are Third-Party Marketplaces Worth More Than the Leads They Generate?

This week I got two separate calls from two different dealers. Same story, different area codes.

Both had cancelled their third-party marketplace subscriptions. And both called to ask me a similar question.

"What do you think? I like where our internet closing rate is trending — but I think third-party leads are dragging us down. So I cancelled them."

I understand the frustration. Advertising budgets carry a lot of waste in most dealerships and these platforms aren't cheap. In my previous role I always had at least 2 third-party marketplace platorms because of our used car operation and I saw firsthand how that spend could be hard to justify when the lead reports didn't tell the whole story.

What I also know is that several of my clients are closing AutoTrader, CarGurus, and Cars.com leads at above 9% conversion. That's not a platform problem. But that's a conversation for another day.

So I did something I don’t normally do. I picked up the phone and called my contacts at all three platforms. I wanted to hear from them, in plain language, what dealers are actually paying for.  I got some answers that I wasn’t expecting.

What the Platforms Actually Said

I spoke separately with contacts at Autotrader, Cars.com, and CarGurus. These aren’t PR calls, these are people I’ve worked with and have extensive knowledge of the platforms and dealer relationships. I asked them to be honest: what are dealers really getting for their money?

All three said leads are approximately 50% of the value dealers are paying for. The other 50% is split between traffic and data.

If that’s accurate and I have no reason to believe it isn’t, then a dealer who evaluates their marketplace spend purely on lead volume is making a decision based on half the value. That’s not a vendor performance problem. That’s a metric problem.

Let’s break down what that other 50% actually looks like.

The Traffic You’re Not Seeing

Here’s a lead that lands in your CRM.

A shopper browses Autotrader on a Tuesday night. They find a vehicle at your store. They click through to your website. They look around for a few minutes and submit a lead directly on your site.

What does your CRM say? Dealer website lead. 

The marketplace drove that customer to your digital showroom and your attribution system gave the credit to someone else. This isn’t a glitch, it’s how standard last-click attribution works. It gives 100% of the credit to the last thing the customer clicked before submitting a lead. Everything that happened before that moment gets lost.

Ask your reps to show you the traffic dashboard.  We looked at one of my client’s stores and one platform delivered 62 leads but it also referred over 300 website visits. 

This is also why the cross-platform shopping behavior matters. Research from Clarivoy tracking over 160 million U.S. shopping sessions found that most buyers visit multiple platforms before they purchase. They don’t submit a lead on every one. They browse, they compare, they click through to dealer websites  and then they convert somewhere else. Every one of those platform visits was part of the customer’s journey and possibly influenced their decision but none of that will show up in your ROI report.

The Data They’re Sitting On

The traffic conversation is straightforward once you understand the attribution problem. The data conversation is more interesting and more complicated.

Here’s what these companies actually know about the car buyers in your market.

Cox Automotive owns AutoTrader, Kelley Blue Book, Manheim, vAuto, Dealer.com, VinSolutions, and Dealertrack. Think about what that means for a second. They have data on what shoppers are searching for, what vehicles are being priced at retail and how fast they are selling, what those same vehicles are selling for at wholesale, what dealers are stocking, and what CRM activity looks like inside thousands of dealerships. That’s not a snapshot. That’s a complete picture of the market from every angle simultaneously.

Cars Commerce owns Cars.com, Dealer Inspire, and AccuTrade. Their data connects marketplace shopping behavior directly to dealer website activity and trade-in valuations. When a shopper browses Cars.com, submits a trade appraisal through AccuTrade, and then lands on a Dealer Inspire website — Cars Commerce sees that entire journey as one connected data set.

CarGurus built its platform around pricing intelligence from day one. Their Instant Market Value model — the system behind their deal ratings — is built on billions of data points across active listings, historical sales, and real-time demand signals. They know what vehicles are moving fast in your market and which ones are sitting. They know it before most dealers do.

These platforms aren’t just listing sites. They are sitting on some of the most comprehensive automotive market data that exists anywhere.

All three platforms made the same point in my conversations: because of the scale of their data sets, they are able to target active shoppers. People who are in market right now, comparing vehicles, close to a decision, far more precisely than a dealer could through standard search or social advertising alone. They know who is shopping. They know what they’re shopping for. And they know how close they are to buying.

That targeting capability is part of what dealers are paying for. Even if it never shows up as a named lead in the CRM.

So Where Is the Data Actually Going?

Here’s where I have to be honest about my own experience because this is where I think the conversation gets complicated.

In my previous role I was subscribed to 2 of these platforms. And the data I actually got access to as a dealer was useful. Vehicle trend reports. Market demand indicators. Which units were getting views and which weren’t. That information helped me make better stocking decisions.

But compared to what information is powering their ecosystem, the data I had was surface level.

The platforms are describing data ecosystems that are genuinely sophisticated. Billions of data points. Cross-platform behavioral profiles. Predictive purchase intent modeling. What dealers typically see in their dashboard is a fraction of that.

So the honest question is: Where is the deeper data actually going?

The answer, if you read between the lines, is that most of it is going into the platform’s own targeting and optimization engine. It makes their advertising more effective. It improves their algorithm. It helps them show the right vehicles to the right shoppers. All of which benefits dealers but it also makes the market far more intelligent and efficient than the dealers.  

The platforms know your market better than most dealers do. The question is how much of that intelligence is actually making it back to you.

This is not an accusation. It’s just the reality of how data-driven platforms work. The data creates value inside the platform’s system. Dealers benefit from that value indirectly through better traffic and more qualified shoppers. But the raw intelligence — the granular behavioral data, the cross-platform purchase paths, the predictive models — stays inside the ecosystem.

Which brings me to what I think dealers should actually be doing with this information.

The Conversation Dealers Should Be Having

Most dealer conversations with marketplace reps go something like this: how many leads did I get last month, why did my cost go up, and what package do I need to see better results.

That conversation is leaving most of the value on the table.

If leads are only 50% of what you’re paying for, then the conversation needs to cover the other 50% too. Here is what that looks like in practice.

Ask for your traffic data — not just your lead data.

How many visitors did the platform drive to your website last month? How many phone calls were generated directly from your marketplace listings? If your rep can’t answer those questions with real numbers, that’s a problem worth pressing on.

Ask how they are targeting shoppers on your behalf.

With the data these platforms have on active shoppers in your market, how is it being used to put your inventory in front of the right people? What does that targeting actually look like? This is not a trick question, it’s a reasonable thing to understand about a service you are paying for.

Ask what market intelligence you should be getting.

Beyond lead reports and VDP views, what data should you be looking at every month to make better decisions? Which vehicles are getting searched most in your market? Where is demand shifting? What are shoppers in your area actually looking for right now? These platforms have answers to those questions. Are they making it to your desk?

Fix your attribution before you make any cancellation decisions.

If you are using your CRM as your only measurement tool, you are almost certainly undercounting what your marketplace spend is actually doing. Clarivoy’s research found that when proper multi-touch attribution was applied, conversions attributed to Cars.com increased by 37% compared to what Google Analytics reported. That is not a small discrepancy. That is a dealer making a budget decision based on numbers that are fundamentally incomplete.

One More Thing Worth Understanding

I want to come back to something practical before we close.

Think about what these platforms actually do for a used car operation specifically. If you’re a Nissan dealer who just took a clean Ford F-150 in on trade, your typical customer has no reason to search your inventory for a truck. They’re looking for F-150s. Their search starts with Ford dealerships. You don’t exist in that search.

The moment that F-150 goes live on a marketplace, it shows up next to every other F-150 in your market. The platform doesn’t care that you’re a Nissan store. The buyer doesn’t care either. They just want the truck.

That’s not advertising. That’s distribution. And it’s one of the clearest examples of value that never shows up in a lead count.

The same principle applies to the behavioral data and the traffic. Most of the value these platforms deliver happens before the lead form gets filled out. It happens in the search results, in the browse session, in the click-through to your website. By the time a lead shows up in your CRM, a lot of work has already been done and almost none of it got credited.

The Bottom Line

I’m not here to tell you whether to stay on these platforms or cancel them. That decision depends on your market, your inventory, your process, and your overall digital strategy.

What I am telling you is this: if you made that decision based purely on lead volume, you made it with incomplete information.

The platforms themselves will tell you that leads are half the equation. Traffic and data make up the rest. And right now, most dealers aren’t measuring the traffic, aren’t seeing the data, and aren’t asking the questions that would give them the full picture.

Before you cancel or before you renew without thinking about it, understand what you’re actually buying. Ask for the traffic numbers. Ask about the targeting. Ask what market intelligence you should be getting for what you’re paying.

You can’t make a good decision about something you don’t fully understand. Now you have a better picture. Use it.

Source Notes

Platform conversations: direct discussions with contacts at Cox Automotive, Cars.com, and CarGurus. Specific attribution and traffic data shared with dealer permission — stores anonymized.

Clarivoy 37% conversion lift and 20% cost reduction: Clarivoy multi-touch attribution study, U.S. market data.

160 million monthly U.S. shopping sessions behavioral data: Clarivoy U.S. research.

Cox Automotive ecosystem: Cox Automotive company documentation. Includes AutoTrader, Kelley Blue Book, Manheim, vAuto, Dealer.com, VinSolutions, Dealertrack.

Cars Commerce ecosystem: Cars Commerce investor relations documentation. Includes Cars.com, Dealer Inspire, AccuTrade.

CarGurus Instant Market Value and deal rating system: CarGurus platform documentation and Bates White Economic Consulting comparative analysis, 2020.

Anonymized dealer traffic data: provided by platform contacts with dealer permission. Data on file. Stores not identified.